KUALA LUMPUR (July 25): Bird’s nest processing company MYMBN Bhd's share price closed six sen higher over its initial public offering (IPO) price of 21 sen on its maiden trading day.

Its closing price of 27 sen was a 28.57% premium over its offer price, and values the group at RM104.2 million.

The counter had traded between 26 sen and 30 sen intra-day with 103.35 million shares changing hands; it was the fourth most active stock on Bursa Malaysia.

In a press conference after the listing ceremony on Tuesday (July 25), executive director and chief executive officer Lavernt Chen said he was very pleased with the opening price, remarking that it was "pure coincidence" that the opening price of 28 sen matched the counter's stock code of "0280".

Mercury Securities co-head of corporate finance Eric Chong said the 33% premium reflected the market's confidence in the company.

Apex Research had valued MYMBN at a fair value of 30 sen based on earnings per share (EPS) of 1.9 sen estimated for FY2024 and a 10% premium over Bursa’s Consumer Products and Services Index 2024 forward price-earnings ratio (PER) of 16.2 times.

Another research unit, Rakuten Trade had ascribed a “buy” call on MYMBN with target price of 27 sen based on 16 times PER over FY2024 EPS of 1.7 sen, a 10% premium over the average PE of its peers on Bursa.

MYMBN raised RM20.58 million from its IPO via the issuance of 98 million shares at 21 sen apiece.

A total of RM6 million was earmarked for business expansion, RM6.6 million to finance additional purchases of raw unclean edible bird’s nest (RUCEBN), and RM1.68 million for establishing three bird's nest collection centres in Sabah and Sarawak.

Additionally, RM1.25 million is allocated for the expansion of processing and sale of raw clean edible bird's nests (RCEBN), RM2.05 million for working capital while the remaining RM3 million is for listing expenses.

Earlier, in an exclusive with The Edge, Chen said that the group’s expansion plans include the processing and sale of RCEBN, which sits in the midstream of the edible bird's nest industry value chain, and venturing into the halal ready-to-drink bird’s nest products market by coming out with its own brand — a more downstream activity.

MYMBN’s expansion into RCEBN products will be conducted by purchasing an 80% stake in a China-based entity which has received the General Administration of Customs China's (GACC) approval — the mandatory food certification for food product imports for the Chinese market — to import RUCEBN into China and then process it into RCEBN to be sold there.

The stake acquisition in the Chinese company is slated to be completed in the second half of the year. Chen expects the company will then take about 20% of MYMBN's RUCEBN total processing capacity of 32,256kg per year.

MYMBN posted a net profit of RM1.74 million in the second quarter ended June 30, 2023 (2QFY2023), taking first half net profit to RM2.96 million.

The group generated revenue of RM23.12 million in 2QFY2023, and RM40.74 million in 1HFY2023.

Revenue from China sales was the highest at RM19.2 million or 83.05% of group turnover in 2QFY2023, followed by Vietnam at RM3.91 million (16.92%). In 1HFY2023, China sales contributed RM36.77 million (90.25%), followed by RM3.91 million (9.6%) from Vietnam.

The principal adviser, sponsor and sole underwriter and sole placement agent for the IPO was Mercury Securities Sdn Bhd.

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